Canadian Centre for Policy Alternatives and world ending budget cuts

The Canadian Centre for Policy Alternatives has released a report that claims to have calculated the impact that government cuts will have on employment. I say claims because the report itself is sloppy and lacks any attention to methodology or theory. The only explanation that we receive for how they came about their private sector job loss numbers is a footnote that says that the multiplier was provided by Informetrica Ltd. The author doesn’t bother to tell us what the multiplier is or why Informetrica Ltd. is superior to other researchers who may have come up with a different multiplier. The author tiptoes around a pretty controversial area of economics without bothering to allow the readers to judge his methodology.

Far more important is the basic assumptions of the work that is presented without even the pretense of an explanation.

The author does not take into consideration that at least some of the cuts can be achieved by creating efficiencies or by reducing compensations and employee privileges. You can easily argue that these will be a small part of the cuts compared to the layoffs but you can’t simply discount it all together. Not every dollar of the funding cuts will lead to a layoff.

There is also the suggestion made by the author through implication that the layoffs would hurt the economy due to creating higher unemployment. Although some of those who are laid off would likely be facing long term unemployment considering the state of the economy, but past experience has shown that laid off government workers tend to enter private sector employment pretty quickly.

The most fundamental assumption of the study is that these jobs are important to the wider economy as well as the health and safety of the Canadian population. This is pretty puzzling because the government is not even proposing reducing the budget to 2006 levels. Was Canada such an unhealthy and unsafe place in 2006? Has all the new funding of the last 6 years been so incredibly useful that we now simply cannot do without it? This is a pretty strange endorsement of the Conservative government coming from the Centre for Policy Alternatives.

Reading this study I can’t help but fear that the poor will be thrown out on the street, natives will be left to starve, and our food will become riddled with poison. All this will happen because the government cut its budget by around 3% over four years. Really makes you realize how greatly important the government is to our lives!

The hysteria coming from groups like the Canadian Centre for Policy Alternatives would be a little more amusing if it wasn’t so pathetic. The federal government is making pretty small cut backs and the CCPA is claiming the world is going to come to an end. This has led them to release a study that is sloppy and foolish to the point that it discredits their arguments entirely. For them, it seems, a dime of reduced government spending is a tragedy and never mind that the government can’t afford to spend that dime.